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Revised FTP will
make Indian exports more competitive, says Minister

The Foreign Trade
Policy (FTP) will leverage the long-term advantages of the historic reform of
the GST, in terms of reduced compliance and logistics costs, stressed the
Minister of Commerce and Industry, Mr Suresh Prabhu, while releasing the
much-awaited Mid-term Review of the FTP 2015-20 here on Tuesday.

The review was
released in the presence of the Minister of State for Commerce and Industry, Mr
C. R. Chaudhary, Finance Secretary, Mr Hasmukh Adhia, Commerce Secretary, Ms
Rita Teaotia, Secretary Department of Industrial Policy & Promotion, Mr
Ramesh Abhishek, and the Director-General of Foreign Trade, Mr Alok Chaturvedi.

Mr Prabhu, in his
keynote address, said that the FTP will focus on exports from labour-intensive
and MSME sectors by way of increased incentives in order to boost employment
opportunities. Emphasis will be given on ‘Ease of Trading’ across borders.
Information-based policy interventions will be ensured through a
state-of-the-art Trade Analytics Division. While share in traditional products
and markets will be maintained, the focus will be on new products and new
markets. The Commerce Minister focused on transparency and trust with the
industry and maintenance of quality standards to succeed in the international
market.

The Minister of
State for Commerce said that the revised FTP will help in making Indian exports
more competitive. Under the dynamic and visionary leadership of the Prime
Minister, the government has made schemes for boosting manufacturing and
exports. The issue of working capital blockage due to GST has also been
resolved. Mr Chaudhary stressed on the need to diversify the export basket. The
export of agricultural products will be encouraged for increasing farmers’
incomes, he said.

The Finance
Secretary emphasised that the government has been very sensitive towards
exporters. The export package was approved by the GST Council, resolving the
problem of blockage of working capital. He further said that ITC and IGST
refunds for exporters are being expedited, and explained in detail the process
and procedure for refund of IGST claims for exporters. He reiterated that GST
will be very beneficial for exporters in the long run. The Ministry of Finance
will continue to work in collaboration with the Department of Commerce and
exporters to address their operational issues.

The Commerce
Secretary said that the FTP will continue with ‘Whole of Government’
approach involving all Ministries and state governments. Over the last 10 years,
exports have grown at a CAGR of 8 per cent which is fairly creditable. The
government recognises that the medium and small scale industries require
handholding and thus rates for MEIS for such sectors have been enhanced. An
important consideration in framing this policy has been the need to ensure that
the FTP is aligned with both India’s interests in trade negotiations, as well
as its obligations and commitments under various WTO agreements. The biggest
challenge, however, is to address constraints within the country, such as
infrastructure bottlenecks, high transaction costs, complex procedures,
constraints in manufacturing and inadequate diversification in services. Towards
this end, she said, the Department of Commerce has set up a new division to
promote integrated and streamlined logistics development in the country. For
addressing the gap in the infrastructure sector, the Trade Infrastructure for
Exports Scheme has been launched, it was pointed out.

Highlights of
Mid-Term Review of FTP

While restoring the benefits under the export
promotion schemes of duty free imports under Advanced Authorisation, Export
Promotion Capital Goods and 100 per cent Export Oriented Units and thus resolving
the problem of blocked working capital for exporters following the roll out
of GST, the FTP review has focused on increasing the incentives for
labour-intensive MSME sectors. Export incentives under Merchandise Exports
from India Scheme (MEIS) have been increased by 2 per cent across the board
for labour-intensive MSME sectors, leading to additional annual incentive of Rs
4,567 crore. This is in addition to the already announced increase in MEIS
incentives from 2 per cent to 4 per cent for ready-made garments and made-ups
in the labour-intensive textiles sector with an additional annual incentive of
Rs 2,743 crore. Further, incentives under
Services Exports from India Scheme (SEIS) have also been increased by 2 per
cent, leading to additional annual incentive of Rs 1,140 crore.

Thus, incentives
under the two schemes have been increased by 33.8 per cent (Rs 8,450 crore)
from the existing incentives of Rs 25,000 crore, in order to facilitate boost in
exports from the labour-intensive sectors and increased employment
opportunities. Some of the major sectors benefited are:

Further, the validity
period of Duty Credit Scrips has been increased from 18 to 24 months and GST
rates on transfer/sale of scrips has been reduced to zero. Issue of gold
availability for exporters has been resolved by allowing specified nominated
agencies to import gold without payment of IGST. Support to Export Credit
Guarantee Corporation is also being enhanced to increase insurance cover to
exporters, particularly MSMEs exploring new or difficult markets.

A new scheme of self-assessment-based duty
free procurement of inputs required for exports
has been introduced. There will be no need of Standard Input Output Norms in
such cases and this will eliminate delays. It is based on trust. Exporters will
self-certify the requirement of duty free raw materials/inputs. The scheme would
initially be available to the Authorised Economic Operators (AEOs) and will get
expanded as more exporters join the AEO programme. The scheme will improve ease
of doing business.

Contact@DGFT
service has been launched on the DGFT website (www.dgft.gov.in) as a single
window contact point for exporters and importers for resolving all foreign
trade-related issues and to also give suggestions. Exporters/importers can track
status of their queries through the assigned reference number. Feedback
mechanism has also been provided. High level monitoring of disposal is being
ensured.

A state-of-the-art
Trade Analytics division has been set up in DGFT for data-based policy
actions. The initiative envisages processing trade information from DGCI&S
and other national and international databases related to India’s key export
markets and identify specific policy interventions.

Focus will be given to Ease of Trading across
borders. A professional team will handhold, assist
and support exporters in their export-related problems, accessing export markets
and meeting regulatory requirements. The team will also examine the procedures
and processes in clearances related to trading across borders for their
simplification and rationalisation and track progress. Dwell time at ICDs, ports
and airports is being closely monitored in coordination with Customs and
infrastructure Ministries.

The Foreign Trade
Policy will continue to be reviewed and evaluated regularly for addressing
concerns of the exporters, simplification of procedures and for promotion of
exports, the release emphasised.